United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Oversight and Investigations,

Committee on Veterans’ Affairs, House

of Representatives

November 1999 VA HEALTH CARE

Food Service

Operations and Costs

at Inpatient Facilities

GAO/HEHS-00-17

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-281940 

November 19, 1999

The Honorable Terry Everett

Chairman

Subcommittee on Oversight and Investigations

Committee on Veterans’ Affairs

House of Representatives

Dear Mr. Chairman:

The Department of Veterans Affairs’ (VA) health care system requires a

number of nonclinical services, such as food services, laundry, and

housekeeping, to support the delivery of clinical care. About one-third of

VA’s health budget is spent on support services. Because these services

make up a sizeable share of health care operating expenses, one focus of

health care systems in the 1990s has been on reinventing the way they

provide support services as a part of their overall efforts to increase the

efficiency of health care delivery. Health care systems have used a variety

of methods in their efforts to increase efficiency. These methods include

consolidation of services, changes in technology, reinvention of work

processes, and outsourcing of services.

VA provides many of these support services in inpatient settings. In fiscal

year 1998, VA spent approximately $8.4 billion on inpatient

services—which include clinical and support services—for about 650,000

inpatients admitted to its facilities. VA provides inpatient health care in 175

locations in its hospitals, nursing homes, and domiciliaries.

You expressed concern that VA may not have focused adequately on

increasing the efficiency of services that support its delivery of patient

care. To address this concern, you asked us to develop a body of work

providing baseline data on major VA support services and assessing

options for increasing the efficiency of these services. You asked that we

begin this work by examining VA’s inpatient food service operations. This

report provides fiscal year 1998 baseline information on (1) the type and

volume of food service VA provides, (2) how VA provides food services,

(3) the cost VA incurs, and (4) the revenues VA generates from sales of

excess food services. We will assess options for increasing the efficiency

of VA food services in a subsequent report.

To conduct our work, we surveyed the 22 Veterans Integrated Service

Networks (VISN) to obtain data on food services at VA’s 175 inpatient

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locations. We also obtained data from VA headquarters officials and

conducted site visits and telephone interviews with local VA officials. (See

app. I for a complete description of our scope and methodology.) Our

work was performed between December 1998 and October 1999 in

accordance with generally accepted government auditing standards.

Results in Brief VA provides a variety of food services to meet the widely varying needs of

patients. For example, patients frequently need specialized food services,

such as diet-restricted meals, snacks for special conditions like diabetes,

and liquid nourishment for those unable to eat solid food. Most hospital

patients need food delivery to their bedside. Many nursing home residents

also require food service in their rooms, although a larger proportion of

nursing home patients eat in congregate dining areas. The volume of food

service at individual locations also varies, with most locations serving

between 100 and 400 patients a day, although 25 percent serve fewer than

100 patients a day.

In fiscal year 1998, VA employees provided food services at 172 of 175 VA

inpatient locations; private contractors provided food services at the 3

remaining locations. VA-operated food service locations buy most of their

food supplies from prime vendors who provide discounts for high-volume

purchases. VA-furnished meals and snacks include food cooked from

scratch; pre-prepared foods that are purchased; and food cooked in

advance and chilled for later use. VA locations also use traditional and

advanced food delivery methods to maintain proper temperatures when

food is distributed. The mix of these methods varies by location.

VA spent about $429 million on inpatient food services in fiscal year 1998.

Of this amount, VA spent about $337 million to produce and distribute

inpatient food and nourishments, with the rest for patient-related activities

such as nutrition needs assessment and counseling. About 72 percent of

production and distribution costs were for the wages and benefits of about

7,348 full-time-equivalent wage-rate employees. VA’s daily food service

production and delivery costs averaged about $24.50 per patient, with

individual locations’ daily costs ranging between $8 and $51 per patient.

The range in costs partly reflects the range in nutritional needs, which are

generally less in domiciliaries than in hospital and nursing home settings.

In fiscal year 1998, 27 VA locations generated modest revenues of $739,000

by using excess food capacity to produce food service for 44 non-VA

organizations. Most sales were to private, nonprofit organizations; the

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other VA sales were primarily to federal, state, and local government

agencies.

Background VA operates 172 hospitals, 131 nursing homes, and 40 domiciliaries.1

 These

facilities—singly or in combination—are located in 175 inpatient locations.

Over the last decade, VA has dramatically decreased its use of inpatient

hospital care by about 58 percent, with most of the decline occurring in

the last 3 years. At the same time, VA has increased its emphasis on

outpatient care by establishing community-based clinics and increasing

outpatient care at hospitals. The downsizing of inpatient care has created

additional pressures on minimizing the costs of support services, as there

are fewer patients who need these services in most locations.2

VA provides food services at each inpatient delivery location to patients,

visitors, volunteers, and employees through its Nutrition and Food

Services (NFS) program and its Canteen Service. The NFS program is

responsible for ensuring that VA’s inpatients receive appropriate and

quality nutrition as an integrated part of VA health care. The Canteen

Service is generally responsible for providing food and other retail

services to outpatients, visitors, and employees at VA’s delivery locations.

NFS services are funded by appropriations; Canteen Service operations are

funded by revenue from sales.

VA has managed its inpatient delivery locations through 22 VISNs since

fiscal year 1996. These VISNs have the responsibility to make basic

budgetary, planning, and operating decisions to meet the health care needs

of veterans living within the geographic area, including the food service

needs of VA inpatients. VISNs vary in the extent to which they direct or

delegate initiatives regarding VA food service operations at their inpatient

delivery locations.

VA’s Food Service

Needs Vary Widely

VA’s food service needs vary widely based primarily on individual patient

needs as determined by VA’s dietitians and the numbers of patients at each

of the 175 inpatient delivery locations. NFS dietitians identify patient

nutrition needs, specify the food service appropriate to meet those needs,

1

A VA domiciliary is a residential rehabilitation and health maintenance center for veterans who do not

require hospital or nursing home care but are unable to live independently because of medical or

psychiatric disabilities.

2

See VA Health Care: Challenges Facing VA in Developing an Asset Realignment Process

(GAO/T-HEHS-99-173, July 22, 1999).

Page 3 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
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and ensure the quality of food and special nourishments that patients

receive.

VA inpatients need regular meals, diet-restricted meals, snacks for those

with special conditions such as diabetes, and special liquid nourishments

for those unable to eat solid food. Diet-restricted meals, snacks, and

special nourishments are most commonly required for hospital patients

and nursing home patients. Less specialized food services are more

common for domiciliary patients.

VA inpatients have food provided in different ways. Many hospital patients

are bed-bound and need food delivered to their rooms. Bed-bound patients

in nursing homes also need food delivered to their rooms, but a greater

proportion of nursing home patients are able to eat in congregate dining

areas than are hospital patients. Domiciliary patients are generally

ambulatory and do not need special assistance with eating.

VA served approximately 40,000 inpatients in its facilities on any given day

in fiscal year 1998. Of these, approximately half received hospital care and

half received extended care in nursing homes or domiciliaries (see fig. 1).

VA provided inpatient food services in every state, the District of Columbia,

and Puerto Rico.

Figure 1: Average Proportion of

Patients Receiving Food Service by

Type of VA Inpatient Facility, Fiscal

Year 1998

Note: N=175 inpatient health care delivery locations.

Source: GAO survey of VA’s VISNs.

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The volume of food service needed also varies widely by delivery location

because of differences in the size of inpatient population. The average

daily population ranged between a low of 18 and a high of 778. Most

locations had an average daily inpatient population of 100 to 400 in fiscal

year 1998 (see fig. 2). However, about one-quarter of the locations had a

average daily inpatient population of less than 100 and about one-seventh

had a daily population above 400.

Figure 2: Percentage of VA Locations

by Size of Average Daily Inpatient

Population, Fiscal Year 1998

Note: N=175 inpatient health care delivery locations.

Source: GAO survey of VA’s VISNs.

VA Prepares Food for

Nearly All Locations

VA meets its food service needs through its NFS-operated kitchens and

Canteen-Service-operated kitchens and through private contractors. VA

uses a variety of methods to produce and distribute food.

NFS Provided Inpatient

Food Services at 168

Locations

NFS fulfilled 99 percent of VA’s food inpatient service needs in fiscal year

1998 through the operation of 158 kitchens. In providing these services, VA

requires NFS kitchens to purchase most food items from prime vendors to

save on procurement costs. Prime vendors agree to sell supplies to

purchasers, such as VA, at discounted prices when the purchaser agrees to

buy a large volume of specified products exclusively from the vendor. VA

headquarters awards contracts to different prime vendors by region. VA’s

NFS kitchens, however, purchase some items, such as milk and bread, from

other suppliers.

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VA uses a variety of methods to produce and distribute food, and many

locations use a combination of these methods to provide inpatient food

services. Historically, NFS has produced most food in kitchens located at

health delivery locations where the food is consumed. Typically, this is

conventional food production or cooking from scratch, using raw

ingredients and recipes. Food production generally takes place just prior

to meals. Some locations use convenience foods primarily or exclusively

to reduce or eliminate cooking on site. Convenience foods are purchased

already cooked or processed. Food items that are served hot are reheated

or cooked just prior to meal time. Although convenience foods are

generally more costly than raw food products, some VA locations believe

that this method is less expensive overall than cooking from scratch

because VA reduces its labor costs for food preparation.

Some locations cook food in advance and chill until needed. There are two

cook/chill options, which may be used independently or together. The first

option, blast chill, can be used for most food items and can chill foods for

up to 5 days before being consumed. This option can, for example,

eliminate the need for weekend hours for many food preparation staff. The

second cook/chill option chills food for 21 to 40 days, but this option is

suitable for fewer types of food than blast chill. The second option

involves one of two processes, depending upon the type of food. The

tumble chill process chills items, such as pasta, that can be pumped into

various sized packets. The cook tank process chills items, such as roasts,

that are vacuumed sealed. Tumble and tank chill processes can produce a

high volume of food in one location—sometimes called food factories or

central production units—for distribution to multiple locations.

After food production, VA must distribute food to patients. This consists of

two steps—assembly and delivery. Most VA locations assemble food

centrally in or near the kitchen where the food was produced. Staff put the

food on plates and trays, usually in a “tray line” where different food

items are placed on a plate by staff at different food stations. Some health

care delivery locations use a decentralized approach, where food is

conveyed in bulk to serving galleys in patient areas where staff assemble

individual trays.

After food assembly, VA delivers food to patients—using traditional or

advanced food delivery methods—to serve food at the appropriate serving

temperature. A common traditional method is the “pellet” system which

consists of a heated pellet (constructed of sealed stainless steel shells) on

which a plate of food is placed and then covered to hold heat. Staff deliver

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food on these pellets to patients. Advanced food delivery systems heat and

refrigerate food that was prepared at an earlier time. This method is

designed to serve as an extension of the advanced food preparation

systems, although it can also be used with traditional food preparation.

VA uses these various food delivery systems to deliver meals in several

ways at its inpatient locations. VA, for example, provides food at bedside to

patients unable to leave their rooms, in congregate dining areas when

patients can leave their rooms but may need assistance with getting their

food, and in cafeteria lines for many domiciliary patients who do not need

assistance with eating.

VA’s Canteen Services

Provided Inpatient Food

Services at Four Locations

Kitchens operated by VA’s Canteen Service provided less than 1 percent of

VA’s inpatient food services needs in fiscal year 1998. Canteen Service

workers prepared food at these locations, although NFS dietitians

continued to have responsibility for assessing patients’ nutritional needs

and monitoring the adequacy of food the Canteen Service prepares to meet

these needs. Canteen Service food operations use a variety of methods of

food production and distribution similar to those used by NFS. The Canteen

Service provided inpatient food services at Marion, Illinois; Poplar Bluff,

Missouri; Wichita, Kansas; and at the Martinez, California, nursing home.

Private Contractors

Provided Food Services at

Three Locations

Private contractors provided inpatient food services to meet less than

1 percent of VA inpatient needs in fiscal year 1998. Private contractors

provided food service at three locations, although NFS dietitians continued

to have responsibility for assessing patients’ nutritional needs and

monitoring the adequacy of food prepared to meet those needs. Private

contractors used methods similar to those of NFS to produce and distribute

food. Sodexho Marriott provided food services for the Anchorage, Alaska,

domiciliary; Sky Chef provided food services for the Honolulu, Hawaii,

nursing home; and G & A Professional Services provided food services for

VA and Department of Defense (DOD) inpatients at the joint VA/Air Force

hospital (Mike O’Callaghan Federal Hospital) at Nellis Air Force Base in

Nevada.

Page 7 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
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VA Spends Hundreds

of Millions of Dollars

on Inpatient Food

Service

VA reported that NFS spent about $429 million for inpatient food services in

fiscal year 1998. Part of these funds were spent for professional dietitian

services. For fiscal year 1998, VA reported that NFS spent $92 million for

about 1,613 full-time-equivalent employee dietitians and related general

service staff who determined patients’ nutrition needs, monitored the

adequacy of food prepared to meet patients’ dietetic needs, and counseled

patients on their continuing nutrition needs.

The lion’s share of VA’s expenses for food service, however, were for

producing and distributing food at VA’s 175 inpatient delivery locations. In

fiscal year 1998, VA reported that it spent approximately $337 million, or

about 80 percent of its inpatient food service expenditures, on the

production and distribution of food to patients. This includes the costs of

about 46 million meals as well as snacks and special nourishments. Most

of VA’s inpatient food costs were for labor—the wages and benefits of

about 7, 348 full-time-equivalent employee wage-grade staff who prepare

and distribute food (see fig. 3).

Figure 3: Distribution of VA Inpatient

Food Service Costs by Source, Fiscal

Year 1998

Source: GAO calculations based on data from VA.

The daily costs of producing food services varied widely among the 134

locations for which cost data were available, ranging from about $8 to

about $51 per patient in fiscal year 1998.3

 The range in costs partly reflects

3

Cost data for the other 41 inpatient locations were available only at the integrated facility level, which

includes two or more locations. The average cost at these integrated facilities, however, is similar to

the average cost of the 134 individual locations for which cost data were available.

Page 8 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
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the range in nutritional needs from location to location. Locations that

have more ambulatory patients with lesser need for special diets in the

domiciliary setting generally have lower costs than locations that have

more bed-bound patients with more serious illnesses and more need for

special diets in tertiary hospital and nursing home settings. These costs

also include a measure to incorporate expenditures and workload for

meals prepared for persons other than inpatients where NFS paid for such

meals (see app. I for details).4 VA’s average daily food service cost was

about $24.50 per patient. About one-fifth of the locations had average daily

patient costs of at least $5 below VA’s average cost, and about one-fifth had

an average daily cost of at least $5 above VA’s average cost (see fig. 4).

Figure 4: Distribution of VA Inpatient

Locations by Average Daily Food

Service Costs per Patient, Fiscal Year

1998

Note: N=134 inpatient health care delivery locations.

Source: GAO survey of VA’s VISNs.

Among the 134 locations for which cost data were available, average daily

costs per patient were higher in locations with smaller average daily

inpatient populations than in larger locations (see fig. 5). These costs are

higher, in part, because the fixed costs of food service operations are

spread over a smaller volume of patients.

4

This includes meals provided by NFS locations for outpatients, volunteers, and employees.

Page 9 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
B-281940 

Figure 5: VA Average Daily Food

Service Costs per Patient by Size of

Location, Fiscal Year 1998

Note: N=134 inpatient health care delivery locations.

Source: GAO survey of VA’s VISNs.

VA Generates Modest

Revenues by Selling

Food Service to

Non-VA Organizations

VA received $739,284 in fiscal year 1998 from the sale of food services by 27

VA locations to 44 non-VA organizations. Revenues were less than 1 percent

of VA’s expenditures on inpatient food services. VA sales to non-VA

organization ranged from $9 to $75,640. The largest customers for VA food

sales were private nonprofit organizations, such as Western South Dakota

Senior Services in Hot Springs, South Dakota, and United Cerebral Palsy

Day Care Center in Canandaigua, New York (see fig. 6). VA also made sales

to government organizations, including federal agencies, such as

Charleston Air Force Base; state agencies, such as the Idaho State

veterans home; and local government organizations, such as the Los

Angeles Homeless Authority Services. VA also sold food services to

for-profit organizations, such as the Columbia Douglas Medical Center in

Roseburg, Oregon.

Page 10 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
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Figure 6: Non-VA Organizations

Buying VA Food Services, Fiscal Year

1998

Note: N=134 inpatient health care delivery locations.

Source: GAO survey of VA’s VISNs.

Agency Comments In an October 25, 1999, letter in response to a draft of this report (see app.

II), VA said that our report provides an essentially accurate description of

food service delivery in the Veterans Health Administration.

As arranged with your staff, we are sending copies of this report to the

Secretary of Veterans Affairs, interested congressional committees, and

other interested parties. We will make copies of this report available to

others upon request.

Page 11 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
B-281940 

If you have any questions about this report, please call me at

(202) 512-7101 or Paul R. Reynolds, Assistant Director, at (202) 512-7109.

Other major contributors to this report were James C. Musselwhite, Senior

Social Science Analyst; John R. Kirstein, Evaluator; Elsie M. Picyk, Senior

Evaluator, Computer Science; and Susan Lawes, Senior Social Science

Analyst.

Sincerely yours,

Stephen P. Backhus

Director, Veterans’ Affairs and

 Military Health Care Issues

Page 12 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
Page 13 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
Contents

Letter 1

Appendix I 

Scope and

Methodology

16

Appendix II 

Comments From the

Department of

Veterans Affairs

18

Figures Figure 1: Average Proportion of Patients Receiving Food Service

by Type of VA Inpatient Facility, Fiscal Year 1998

4

Figure 2: Percentage of VA Locations by Size of Average Daily

Inpatient Population, Fiscal Year 1998

5

Figure 3: Distribution of VA Inpatient Food Service Costs by

Source, Fiscal Year 1998

8

Figure 4: Distribution of VA Inpatient Locations by Average Daily

Food Service Costs per Patient, Fiscal Year 1998

9

Figure 5: VA Average Daily Food Service Costs per Patient by

Size of Location, Fiscal Year 1998

10

Figure 6: Non-VA Organizations Buying VA Food Services, Fiscal

Year 1998

11

Abbreviations

DOD Department of Defense

NFS Nutrition and Food Services

VA Department of Veterans Affairs

VISN Veterans Integrated Service Network

Page 14 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
Page 15 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
Appendix I 

Scope and Methodology

We focused our work on VA’s inpatient food services for fiscal year 1998 to

provide baseline information on (1) the type and volume of food service VA

provides, (2) how VA provides food services, (3) the cost VA incurs, and

(4) the revenues VA generates from sales of food services.

To obtain this information, we interviewed VA headquarters officials in NFS,

Canteen Services, the Office of the General Council, and other offices. We

obtained documents from headquarters on food service roles in VA, how

food service is provided, and national data on total costs and employees.

We obtained location-specific data through surveys and survey follow-ups

to each VISN on food services at each inpatient location. Specifically, we

obtained information on food service needs, how VA provides services, VA

costs, and revenues from food sales at each VA inpatient location. VISNs and

locations also provided us with reports and studies on various food service

changes in food production and cost that were under way or planned. We

tested need, financial, and other data provided in the survey by comparing

data from the inpatient locations in various ways. We compared the data

over time in the same location, compared data for locations of similar size,

and compared location data with other published data, where available.

Where differences were found that were material to our analysis, we

conducted telephone follow-ups to VISNs, locations, and headquarters and

reconciled conflicting data. We also did additional comparisons with

locations whose costs were unusually high or low and followed up where

necessary to confirm the accuracy of information. In addition, we

compared our survey totals to nationwide VA data on average inpatient

population and NFS costs and employees. We also obtained additional data

through interviews, documents, and physical inspections of kitchen

facilities and food delivery at VA locations. We visited VISN 8 (Bay Pines)

and its Tampa and Bay Pines locations. We also visited VISN 15 (Kansas

City) and its Marion, St. Louis Jefferson Barracks, and St. Louis John

Cochran locations.

We used the average daily cost per patient in our analysis as our measure

of unit costs. We used this measure because it incorporates all nutrition

and food service costs and provides for more comparability of costs

across VA. This measure includes all costs of each patient for 1 day—all

meals, the number of which can vary depending upon definition; snacks;

and special nourishments. In addition, we incorporated the cost of NFS

meals provided to persons other than inpatients to avoid overstating the

food service costs at locations where the number of such meals is

significant. To do so, we assumed that three meals to persons other than

Page 16 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
Appendix I 

Scope and Methodology

inpatients equaled 1 day of inpatient food service. This somewhat

understates the daily cost per patient in locations that provided a

substantial number of meals to persons other than inpatients because this

assumption includes no costs for snacks and special nourishments. These

additional meals were primarily for outpatients but also included meals for

volunteers and employees.

We also conducted a literature review of the food services industry and

interviewed selected non-VA food service officials. These included officials

from the private sector, food service industry organizations, and DOD

health care.

We performed our review between December 1998 and October 1999 in

accordance with generally accepted government auditing standards.

Page 17 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
Appendix II 

Comments From the Department of

Veterans Affairs

(406163) Page 18 GAO/HEHS-00-17 Food Services at VA Inpatient Facilities
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